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NEW DELHI, Oct. 21

THE impact of fiscal policy and enhanced budgetary spending on infrastructure, especially road projects, is finally beginning to be felt. Production of cement and steel has gone up by 9.8 per cent and 9.3 per cent, respectively in the first-half of the current fiscal.

During April-September 2002, production of cement, at 568.18 lakh tonnes (l.t), was 9.8 per cent higher than last year's corresponding output of 517.52 l.t. and the 500.30 l.t. level of April-September 2000. Similarly, finished steel output surged by 9.3 per cent to touch 162.664 l.t. during April-September 2002, from 148.871 l.t. and 150.222 l.t. achieved in the corresponding first-half periods of the preceding two fiscals.

The uptrend in cement and steel production is reflective of buoyant construction activity in the economy arising from the stepped-up budgetary allocations for the National Highways Development Project (NHDP) and the various tax breaks given for housing in recent Budgets. So far, around Rs 10,000 crore has been spent from budgetary resources on the NHDP in the last couple of years. Similarly, the deduction of up to Rs 1 lakh allowed on interest payable on housing loans (enhanced to Rs 1.5 lakh in the 2001-02 Budget) has helped boost construction activity in the economy.

Powered by the higher growth in cement and steel, the official index of the six `core' infrastructure industries — which also include crude petroleum, refined petro products, coal and electricity — has registered a healthy increase of six per cent during April-September 2002. This is against a mere 1.5 per cent growth recorded during the first-half of the previous fiscal.

Output of refined petro products rose by 5.6 per cent from 488.93 l.t. in April-September 2001 to 516.43 l.t. in April-September 2002, while amounting to 469 l.t in April-September 2000. Production of crude petroleum in the first-half of the current fiscal, at 165.32 l.t, too, was 5.2 per cent higher than the 157.11 l.t. figure for April-September 2001 and 161.82 l.t for April-September 2000.

Production of coal during April-September 2002, at 1,513 l.t, stood 5.9 per cent higher than the 1,429 l.t. figure for April-September 2001 and 1,399 l.t. for April-September 2000.

The country's total electricity production during April-September 2002 was assessed at 262.027 billion units (kW/h), which was 3.4 per cent higher than the 253.408 billion units generated during the same period last year and the 245.530 billion units of April-September 2002.

Significantly, generation from hydel sources has shown a continuing decline from 42.350 billion units in April-September 2000 to 40.782 billion units in April-September 2001 and a mere 37.706 billion units during the first six months of the current fiscal. Deficient monsoon rains and low reservoir levels have contributed to this situation.

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